Table Of ContentOther Pergamon Titles of Interest
DARIN-DRABKIN Land Policy and Urban Growth
FAGENCE Citizen Participation in Planning
GEORGESCU-ROEGEN Energy and Economic Myths
LASZLO & BIERMAN Goals in a Global Community
MENON Global Dialogue: The New International
Economic Order
PECCEI The Human Quality
RAPOPORT Human Aspects of Urban Form
GLOBAL MODELS AND THE
INTERNATIONAL ECONOMIC ORDER
A paper fot the United Nations
Institute for Training and Research
Project on the Future
SAM COLE
Science Policy Research Unit
University of Sussex
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Copyright © 1977 UNITAR
British Library Cataloguing in Publication Data
Cole, Sam
Global models and the international economic order.
1. Economics - Mathematical models 2. Economics -
Statistical models
I. Title II. United Nations Institute for Training
and Research
330' .01'84 HB135 77-30175
ISBN 0-08-022025-8 (S)
ISBN 0-08-022991-3 (H)
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Preface
In a way it could be said that global models need no justification except that
they are a natural and inevitable product of the age of the computer. Yet, in
the last few years they have acquired considerable status and have become a
part of the institutional system within which policy makers and investors
operate, particularly when the consideration of long-term future is involved.
They are, therefore, a matter of public interest, and their stated objectives,
as well as their conceptual and methodological approaches must be subject
to close scrutiny.
It is not clear to what extent global models already influence the
decision-making process, but, as of now, their cultural impact is
unmistakable; in the flowering of a vigorous, if often incoherent, "Futures"
Movement, in the emergence of new mental processes and in the assertion of
new value systems.
In an era alert to the reality of world interdependence and imbued with a
newly discovered sense of planetary concern, the authors can claim, with
very good reason, that models have a unique capacity to organise in a
coherent framework a formidable array of data. This in turn provides for a
specific and detailed examination of global interactions and feedback
processes and is thought to facilitate the projection of a well articulated
vision of the Future. Through the elaboration of alternative scenarios, some
of which may be adequately related to policy choices, the long-term
reflection of policy-makers may be broadened and stimulated.
Furthermore, the development of a new approach to the long-term future
coincides with the erosion, or perhaps the demise of the integrative theories
which had served to explain the behaviour of a large area of the world
economy. Whether the situation in this respect calls for an "act of
demolition,, (to use Kaldor's terminology), or whether the paradigms are still
susceptible of repair, computerised models have come to be looked upon as a
logical substitute or at least a useful adjuvant in the tasks of problem-solving
long-term forecasting and policy formulations.
The prestige conferred by a wide public on a new analytical tool is not,
however, the only element at work in the success of global models. The
nature of the message for which the early specimen was the privileged
vehicle—that embodied in The Limits to Growth and promoted by the Club
of Rome—was of course determinant. It was not the optimistic projections
produced by the Hudson Institute of a world expanding demographically,
economically and technologically that created the major impact, but rather
the "scenario of the unacceptable" projected in the MIT models, with its
gloomy forecasts of "overshoot and collapse". As a result, it became, for a
while at least, very difficult to express oneself about the long-term future
except by reference to that message.
The reasons for this preference would require a thorough sociological
analysis. What can be said is that it is closely associated with the widespread
"malaise" and loss of confidence noticeable in the dominant culture during
the Sixties. This state of mind, although it encompassed many different
grievances and types of alienation, found its most effective expression in the
ecological movement with its condemnation of a world system too
exclusively based on growth and technology. It was this school of thought
that gave to the "Futures" Movement its incipient impetus and original bias.
It may also be for this reason that the reactions in the United Nations
were often hostile and that the motivations of the modellers were suspected.
Ecological preoccupations tended often to be seen as a diversion induced by
elitist groups. In addition, the homogenised world, the uniform distribution
of problems which emerged as a result of the methodology adopted, the lack
of attention to the conflictual situations, to the rich-poor confrontation as a
major element of world dynamics, seemed somewhat unreal.
The United Nations may have been slow in responding to the challenge of
The Limits to Growth in a systematic way. Yet, in devising development
co-operation policies and working towards a New International Economic
Order, the United Nations had, for a long time, produced its own long-term
projections which, in a way, amounted to another "scenario of the
unacceptable". By stressing elements felt to be crucial to the progress of
developing countries—the savings gap and the foreign exchange gap—it
revealed situations becoming quite explosive unless drastic corrective
measures were adopted and sustained over a period of time. These exercises
were based on simple models also using exponential curves. The premises
however were very different from those underpinning the Club of Rome's
initial approach. They emphasised defects of social organisation rather than
physical limits, and they postulated growth as the very foundation of
progress and technology as the principal ingredient of growth.
This initial polarisation between two approaches, one concerned with the
war against poverty, the other with the prevention of catastrophies, did not
last. In fact, although the United Nations approach did not have the
dramatic impact of the early models of the Club of Rome, it may still prove
to have the greatest staying power, based as it is on enduring moral and
political imperatives rather than on controversial ecological hypotheses. The
shift of emphasis from physical limits to the New International Economic
Order is apparent in recent global models as well as in the adaptation or
presentation of earlier ones. For instance, the Mesarovic/Pestel model
originally labelled as a blue-print for human survival and imbued with the
sense of impending catastrophe, was recently presented in the United
Nations as a "frame of reference in the construction of a New International
Economic Order", and is helpful also in that context.
It has also become important for the United Nations to integrate in its
own thinking and modeling the dimensions highlighted in the questions
dramatically posed in The Limits to Growth. The New International
Economie Order must be concerned with the provision of food and security
of food supplies for a still fast growing population, with the avoidance of
energy and raw materials scarcities at a time when the maturation period of
investments and the lead time for the perfection of new technologies are
lengthening, and with the preservation of essential ecological balances in a
world where progress for two thirds of humanity must still heavily rest on
rapid industrialisation.
With the publication of the Leontief Report, "The Future of the World
Economy", the United Nations is asserting its continuing interest in the use
of global models for the promotion of a New International Economic Order.
The Organisation will most probably now work as part of a wide network of
institutions, some public, some private, where the same discipline is being
pursued and gradually refined. Critical analysis is therefore necessary on a
continuing basis. For one may legitimately be concerned with hasty
conclusions—perhaps resulting in gross misallocation of resources—derived
from large scale simulation exercises which would appear to require a more
reliable data base than is at present available. World models have already
exemplified their unique educational value for the understanding of the
complexities of international relationship. Their usefulness as a
representation of the behaviour of the world economy probably makes them
an indispensible tool in the exploration of the future of a global society and
of the process of its transformation. One must, however, be more reserved in
respect of their capacity to assist in policy assessment or in forecasting.
It is for these reasons that UNITAR at an early stage in the development
of its programme of "Futures Studies", commissioned a report on Global
Models and the New International Economic Order in the hope that it may
help governments and concerned citizens in their appraisal of the present
"state of the art" in a complex discipline. The study may also be useful in
highlighting the areas in which further investigation should be rapidly
undertaken if global modelling is to become an increasingly useful
instrument for the pursuance of United Nations objectives as expressed in
the concept of the New International Economic Order. As was already
alluded to, the desire to reach rapidly a "view of the whole" may have been
pursued more dynamically than the effort to see and measure clearly and
accurately the parts. While this is a reflection of a deep anxiety of mankind,
of the search for new paradigms which would begin to alleviate some of the
perplexities which recent history has produced, the temptation of sweeping
generalisations is not always resisted, and the positive knowledge necessary
to support them has seemed at times to be dangerously limping behind.
As new financial resources are likely to become available for the scrutiny
of the future, it is important that a coherent programme be devised within
the United Nations system, and to that effect certain considerations must be
kept in mind.
Such a programme should perhaps, in the first instance, aim at bridging
the knowledge gap affecting the reliability of global models. Exploration of
the supply constraints, particularly where non-renewable resources are
concerned, should be high on the agenda. If we do not see them today in the
gloomy light of Limits to Growth, they remain as ill-documented constraints
of cost and time. In the field of energy these difficulties are compounded by
the grave risks and controversies attached to the proliferation of nuclear
power, and other uncertainties pertaining to the integrity of the
environment.
It is also a major conclusion of the Study that technological change and
the choice of technology are not well accounted for within any of the global
models as they are currently constructed. The substitution between capital
and labour is now increasingly recognised as critical to the development
process, but none of the models provides a satisfactory theoretical
framework which would help in organising the numerous data already
collected and in developing guidelines useful to planners and policy makers.
In spite of the influence of the ecological school on the development of
the "Futures Movement", little progress has been made in imparting a degree
of rationality to the decision-making process. In the field of environment
policies, the Leontief model provides a useful appraisal of the costs of
pollution abatement, and confirms that it is by no means small in global
development terms. Here again the misdirection of misallocation of resources
cannot be taken casually. Yet decisions are all too often the outcome of a
contest between rival pressure groups. Beyond the fact-finding necessary to
appraise the dangers, inconvenience or disamenities incurred, one would
need an analytical frame of reference for the calculation of some of the
trade-offs involved in various situations.
There are of course many other areas where the decision-makers are not
well equipped to make choices which may have long-term and costly
consequences, among them changes in consumption patterns. If development
policies are to follow more closely an optimum path in a context of largely
unidentified constraints, the art and technical talent which have been
successfully applied to global modelling could now be oriented for a while
towards the more modest goal of working out more specific analytical tools
designed to advance a New International Economic Order.
Finally, it should also be stressed that a programme of Futures Studies in
the United Nations should not be confined to subjects lending themselves to
treatment by mathematical models. Factors which are not easily quantifiable
may be equally important in the process of transformation. Institutional
arrangements are sometimes decisive in retarding the desired changes.
Research and development costs, for instance, are considerable for some of
the technologies which now must be perfected in the fields of energy-
including conservation—natural resources and industry. They may be
magnified perhaps several times over by the conditions under which the
activities are being organised. The principle of confidentiality, for instance,
which affects public as well as private enterprise seems to be multiplying the
costs and increasing the delays.
A comprehensive and balanced United Nations programme requires a very
broad approach covering a wide spectrum of intellectual disciplines. Value
systems, goals and aspirations, enter more and more in the speculation about
the future and indeed find their way in the structure of global models. In the
search for solutions to problems of scarcities, environment, or consumption
levels, a drastic change in ethical values, leading to new life-styles and
consumption patterns is sometimes assumed to be not only more desirable,
but also more easily achieved than technological innovations or adaptations.
Yet little attention is given to the determinants of value systems, to their
built-in inertia and the conditions under which they may evolve.
It is also doubtful that models may be of great assistance in inspiring the
collective behaviour which is called for in respect of some of the major
uncertainties, entailing grave risks, which will, probably for a long time,
confront humanity—genetic engineering, climate changes and the nuclear
syndrome. Consensus would have to be sought without the chances of
rationality derived from scientific knowledge.
These problems would require different, qualitative approaches, (although
in certain phases, mathematical modelling may marginally assist the
exploration of alternatives), and it would be regrettable if a programme of
Futures Studies in the United Nations were to privilege one approach at the
exclusion of others.
Philippe de Seynes
Sam Cole, the author of the Study, was a theoretical physicist working at the Cavendish
Laboratory, Cambridge. He joined the Department of Environment of the United Kingdom
Government in 1969 and later the Science Policy Research Unit, Sussex University, on a research
programme, Social and Technological Alternatives For the Future. He is coeditor of "Thinking about
the Future," "Global Simulation Models," and "World Futures—The Great Debate."
1. Introduction
Aims and Content
In 1972, a computer model of the world was described in a book, The Limits
to Growth. The study received much publicity and attention, since it
claimed to show that the finite nature of the earth's physical material,
agricultural and environmental resources posed very urgent and serious
problems for overall global economic and demographic growth. The
"doomsday" scenarios which resulted from the work was much criticised
(for reasons we indicate later) but stimulated interest in the possibility of
using such models to explore alternatives for long-term global growth. Since
that time a number of new world models have been built which with The
Limits to Growth are the subject of this paper.
The Limits to Growth was in part a product of the ecology debate which
began in the 1960's following the period of post-war economic growth.
Publication of the book coincided with the UN Conference on the Human
Environment in Stockholm. Because of its focus, the book increased
attention on the global nature of environmental problems. By the time of
the UN Conference on Population in Bucharest in 1974 and the Conference
on Food and Agriculture in Rome in 1975 attention was again directed more
at the very great regional differences in the impact and nature of problems,
although still within a global context. With the relative failure of the First
UN Development Decade the growing income gap between rich and poor
countries, the very pressing economic problems of the latter especially, were
a focus for attention.
Stimulated in part by the apparent success of the OPEC nations in almost
overnight changing their relative international and political status, the idea of
a New International Economic Order (NIEO), which would help to eliminate
or at least reduce international disparities, took shape. According to the UN
Secretary General, speaking at the 1976 UN Conference on Trade and
Development in Nairobi, there were four main objectives essential to a new
economic order which, if reached, would reduce the gap between the "have"
and the "have not" countries. These were: to help developing nations
increase their share of world industrial output significantly by the end of the
century to reach self-sufficiency in food production reasonably rapidly to
assist the under-developed world in the progress of their science and
technology, and to do all possible to eradicate mass poverty and
unemployment.
The new world models have been built by research groups in several
countries, the United States, Japan, several European nations, the Argentine
1
and one sponsored by the UN. All are models of global demand, supply and
distribution of economic and environmental resources and have been used by
their authors to examine one or several of the issues raised by the concept of
a NIEO. All of the authors offer strategies for bringing about changes in the
pattern of global development based on the model results.
We shall examine the assumptions in the models and the methods adopted
and attempt to assess the present and potential usefulness of each. Other
world models and techniques designed to examine specific regional and
sectoral issues will also be taken into account (see Table 1).
TABLE 1
Summary of Models Described
No. of
Place of Project Regions
Model Origin Leader Method Examined
The Limits to Growth USA D. Meadows System 1
Dynamics
Strategy for Survival USA/ M. Mesarovic Hierarchical 10
FRG & E. Pestel Systems Theory
The Alternative AArrggeennttiinnaa A. Herrera Optimisation of 4
World Model & Others Basic Needs
A New Vision for Japan YY.. KKaayyaa Control 9
Development Theory
The UN World Model USA W. Leontief Input-Output 15
Other Models Considered
Place of Project
Model Origin Leader Topic
MOIRA— Netherlands H. Linnemann World Food
International
Relations in
Agriculture
SARUM- UK P. Roberts WWoorrlldd EEccoonnoommyy
Department of
Environment
Bachue Employment ILO G. Rogers Employment in a Single
Model Developing Region
2
